It’s very frustrating to see a generic / descriptive domain name taken away from a registrant via UDRP. Not only is it unfair, but it also adds to the cost of doing business, as a UDRP defense has become a risk that needs to be factored into any domain investor’s business model.

Back in late 2008, Balglow Finance, a Brazilian company operating a sunglasses business known as “Chilli Beans,” filed a UDRP for the descriptive domain name, ChilliBeans.com. The domain name was/is owned by Frank Schilling’s company, Name Administration, Inc. When the three person NAF panel ruled against Name Administration in November of 2008, the company filed a lawsuit in its Grand Cayman jurisdiction in order to keep the domain name.

I was just informed that Name Administration has prevailed in its nearly two year legal effort to keep this domain name. According to a release I received this afternoon, the companies agreed that “NAI’s use of the generic Chillibeans.com domain name violated no enforceable rights of Balglow Finance.”

Name Administration has agreed to transfer the domain name to Balglow for an undisclosed settlement. According to Schilling, “while it’s unfortunate that this dispute necessitated a trip to the Cayman Court, we are most pleased to have resolved the matter in such a mutually beneficial way.”

As a result of owning such a stellar domain portfolio of generic/descriptive domain names, Name Administration has been a frequent target of UDRP filings. Some companies wrongly believe they have more rights to domain names than his company, although they are most often proven wrong by UDRP panels. When I spoke with Frank, he discussed his company’s history with UDRP filings.

“We’re never looking to pick fights over IP rights and have really tried hard to do the right things in the domain name business, for a very very long time, but we’ve won 17 UDRPs. That should say a lot. Large companies often want what you have and don’t want to pay for it. They try to vilify you for making money with generic domain names, and the UDRP has created an unholy intimation that holding a generic name for profit is somehow bad. Well it isn’t! Everybody owns something – and when people challenge our generic IP rights we will spend whatever it takes to make our point that anyone is free to register a generic name on a first-come first served basis.”

It’s good to see Name Administration prevail in this dispute. I hope other companies realize that filing a UDRP for a descriptive domain name may seem like a cost effective option at first blush, but it can lead to a costly and drawn out legal battle if they mess with the wrong company.

About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.

NA is earning revenue by parking a domain that exactly matches an intentionally-altered spelling (“CHILLI BEANS”) of the generic term “chili beans”, that is a branded and trademarked term actively used in commerce by a Brazil-based company selling sunglasses and related items.

The UDRP panel came to the right decision here. Berryhill was desperately grasping at straws — its no wonder he lost this one for NA. NA was in the wrong and I’m sure he knew it. But read the entire decision and see for yourself.

I found this excerpt of the decision particularly interesting in light of where the domain’s traffic was coming from:

“Moreover, this Panel cannot ignore the implications of publicly available traffic rankings generated by Alexa â€“ and unchallenged by the Respondent â€“ reflecting that in August 2008 some seventy-five percent (75%) of the traffic to the Respondent’s website originated in Brazil. This is significant given that the CHILLI BEANS mark has been used in Brazil since as early as 2000 and is more widely known there than in other areas of the world.”

I hope Frank sells the domain to Balglow Finance for $1 and hopefully he’s learned an important lesson here.

Did you decide to not read the article? You say, “NA was in the wrong,” which is incorrect, in light of the fact that both companies agreed that â€NAIâ€™s use of the generic Chillibeans.com domain name violated no enforceable rights of Balglow Finance.â€

Had you actually read the post you would know that Balglow Finance now has the domain name: “Name Administration has agreed to transfer the domain name to Balglow for an undisclosed settlement.”

I believe the undisclosed settlement was probably ALOT more than $1, especially considering the time and effort it took to prevent them from trying to take it.

I’m sure both entities “agreed” to that language in part because BF didn’t want to wait any longer to obtain the domain that according to both a UDRP decision and trademark law in Brazil is rightfully theirs. A court proceeding in Grand Cayman is likely to have been costly for BF as well, considering the distance between the 2 countries. A UDRP panel rightly decided for BF but NA didn’t want to give in — after all, they’ve NEVER lost a UDRP before! So, they filed this court action. BF probably didn’t want to go through additional time and expense to obtain the domain, so they likely “agreed” to a settlement that hopefully will involve a very minimal price and a very quick transfer.

Currently, WHOIS shows the domain still registered to NA and still parked, so my guess is that BF does not yet have control of the domain name.

This post serves as LEGAL notice of the fact that the term Mr Bean is a registered TM as of Jan 2010 so we will kindly ask you to find another blog posting handle immediately and be informed that legal action will be taken against you. Legal action that WILL result in a long and costly lawsuit against you seeking monetary damages for the confusion you have created with your use of the Trademark term Mr Bean.

It seems to me that if a company chooses to use a mark that is very close or identical to a generic term and manage to register this as a trademark then they really have it coming when a later court realises the trademark office made a mistake in registering it in the first place.
My admittedly incomplete knowledge of trademark law is of the understanding that generic terms are not trademarkable.
Find a unique mark or suck it up when other people share the same language.

Generic terms can be trademarked. For example, see Target. However, in theory any trademark can be used by someone besides the trademark holder. It mainly comes down to how the trademark is used.

A great example is Delta. There is the airline Delta, and there is the bathroom fixture company Delta. They can both use the name Delta because they operate in completely separate spheres of industry. Because they do, there is little risk of confusion to the consumer.

Without having read the court order, or the arbitration decision…the fact that 85% of the traffic to the site came from Brazil would certainly seem to be a compelling piece of evidence that users were going to the site looking for that specific company.

Of course the next question would be what was actually on the site. If it was ads selling sunglasses…there would be a good argument that there was a violation.

So can Sunglasses Hut ™ sue other sunglasses firms who mention ‘sunglasses’ in their name, it is after all a majority of their trademark?
I think a trademark close to a generic term will tend to have less protection, whatever the letter of the law. Businesses or individuals would be better to go with a unique mark in my opinion.
It really comes down to how similar one mark is to another – maybe an (openly published) algorithmic scoring system should be used, not to decide guilt of course but to decide on a level of similarity. Then if the domain is used in trading in the sector to which the trademark applies its no brainer. That might cut down on some vexatious litigation and some pot shoots – as there would be a good degree of certainty to the outcome with respect to a trademark violation.
Everyone would be able to run their names through the algorithm and if it shows a similarity to an existing trademark then dont use it in that sector. simple.

They could if they could afford it, much more demonstrate trademark rights and if likelihood of confusion exists. The latter is where it essentially boils down to, assuming they indeed have a trademark.

Apple is a common word…Tide is a common word…Shell is a common word…yet they’re all rather arguably strong trademarks too in their respective fields. Whether they’ll go after those using variations is up to each of them, but some of them are probably smart enough not to pursue every action if it’s especially not worthwhile.

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